This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
An infant's contract of partnership usually presents one of four points for adjudication: (1) can an infant empower his partners to bind him; (2) can an infant be held personally liable by the partnership creditors; (3) can an infant recover his property contributed to the partnership as against the rights of partnership creditors; and (4) can an infant recover such property as against his partners. As we have seen,1 an infant's appointment of an agent is by the better view, voidable and not void. Hence his authority to his partners to bind him, is voidable.2 Until avoided the contract is valid. Hence it may be dissolved and a receiver appointed,3 and an assignment of the property of a firm which is largely indebted but not insolvent may be avoided by an infant partner.4 It is well settled, moreover, that an infant can avoid his contract of partnership to the extent of relieving himself from his individual liabilty for partnershp debts.5 So a continuing partner who assumes all the firm liaof an infant payee before disaffirmance, it is not now necessary for us to decide." In Welch v. Welch, 103 Mass. 562, quoting from Nightingale v. Withington, 15 Mass. 272; 8 Am. Dec. 101, is a dictum that in such a case the minor could not recover; but in Nightingale v. Withington there was no revocation; and in Welch v. Welch the court held that one who had on order of an infant paid over the infant's money to the necessary support of the infant's father could not be compelled to pay it again to the infant.
14 In re Soltykoff (1891) 1 Q. B. 413.
1 See Sec. 859.
2 Whitney v. Dutch, 14 Mass. 457; 7 Am. Dec. 229; Dunton v. Brown, 31 Mich. 182; Folds v. Allardt, 35 Minn. 488; 29 N. W. 201.
3 Bush v. Linthicum, 59 Md. 344.
4 Foot v. Goldman, 68 Miss. 529; 10 So. 62.
5 Lovell v. Beauchamp (1894), A. C. 607; Goode v. Harrison, 5 Barn. & Aid. 147; Conklin v. Ogborn, 7 Ind. 553; Mehlhop v. Rae, 90 Ia. 30; 57 N. W. 650; Neal v. Berry, 86 Me. 193; 29 Atl. 987; Mason v. Wright, 13 Met. (Mass.) 306; Tobey v. Wood. 123 Mass. 88; 25 Am. Rep. 27; Osburn v. Farr. 42 Mich. 134; 3 N. W. 299; Folds v. Allardt, 35 Minn. 488; 29 N. W. 201.
bilities cannot recover from a minor partner his share of a firm note excluded from such liabilities.6 He may even disaffirm his individual liability without disaffirming his contract with his partners.7 Whether on disaffirming he can recover property contributed by him to the partnership assets, to the prejudice of partnership creditors is not so clear. In some cases, it has merely been held that the proceeding in question was not a proper one for asserting such a right, without always deciding whether the right existed.8 Thus pleading infancy in a suit on a partnership debt,9 suing the assignee in insolvency to recover one-half of the partnership assets,10 or suing to renounce the partnership and have a receiver appointed, with a prayer for priority in payment of money advanced,11 have each been held not to permit the infant to recover his share of the assets to the prejudice of the firm creditors. But where the courts have expressed an opinion on this point they have denied the existence of this right.12 The weight of authority clearly is that an in-
6 Neal v. Berry, 86 Me. 193; 29 Atl. 987.
7 Mehlhop v. Rae, 90 Ia. 30; 57 N. W. 650; Conary v. Sawyer, 92 Me. 463; 69 Am. St. Rep. 525; 43 Atl. 27; Tobey v. Wood, 123 Mass. 88; 25 Am. Rep. 27; apparently contra, Miller v. Sims, 2 Hill (S. C.) 479; Salinas v. Bennett, 33 S. C. 285; 11 S. E. 968.
8 "If an infant partner can repudiate his contract and call for a return of his share of the capital, without regard to the account of profit and loss, it must be upon some proceeding instituted for that purpose, and on which the rights of the other partners and of creditors of the firm may be considered and protected." Gay v. Johnson, 32 N. H. 167, 169.
9 Gay v. Johnson, 32 N. H. 167
10 Conary v. Sawyer, 92 Me. 463; 69 Am. St. Rep. 525; 43 Atl. 27.
11 Shirk v. Shultz, 113 Ind. 571; 15 N. E. 12.
12 Shirk v. Shultz, 113 Ind. 571; 15 N. E. 12; Conary v. Sawyer, 92 Me. 463; 69 Am. St. Rep. 525; 43 Atl. 27; Bush v. Linthicum, 59 Md. 344; Pelletier v. Couture, 148 Mass. 269; 1 L. R. A. 863; 19 N. E. 400; Yates v. Lyon, 61 N. Y. 344; reversing, Yates v. Lyon, 61 Barb. (N. Y.) 205. " The plaintiff, however, contends that inasmuch as he was a minor and had disaffirmed his personal liability for the debts of the firm, he has an individual interest in such of the partnership property as had been fully paid for at the time when insolvency proceedings were instituted. We do not think that such a contention is maintainable either on principle or on authority. ... It will be observed that he did not and does not disaffirm his contract of copartnership, but only his liability for firm debts. He claims title to the goods sued for as a partner, such goods having been paid for by the firm and being partfant cannot on rescinding Lis contract on that ground alone recover from his partners what he has advanced to the assets of the firm, but only his proportionate share after payment of all debts.13 This of course eliminates the question of fraud and the like. Thus a loss of capital must be divided equally, and not be borne exclusively by the adult partners.14 Unfortunately, many of the decided cases rest on the proposition that a minor cannot recover back money paid by him; and sound reason seems to be with the minority view that the minor may recover money advanced by him.15 nership assets." Conary v. Sawyer, 92 Me. 463, 467; 69 Am. St. Rep. 525; 43 Atl. 27. "It is not too much to say that if an infant goes into a mercantile venture which proves unsuccessful he ought, at least, to be held so far that the assets acquired by the firm should be applied to the payment of the debts of the concern. If he has been cajoled into any waste of his capital, it hardly seems equitable that the creditor of his firm should, either directly or indirectly, be called upon for reimbursement." Yates v. Lyon, 61 N. Y. 344, 346; reversing, Yates v. Lyon, 61 Barb. (N. Y.) 205. But Yates v. Lyon is obiter in this point, as the question was whether an assignment by a firm of which an infant was a member was void. The distinction suggested by the note to Craig v. Van Bebber, 18 Am. St. Rep. 569, 604, one of the clearest discussions of the rights of infants yet written, between creditors who have disposed of property to the firm which it still retains and others, is ignored in Conary v. Sawyer, 92 Me. 463; 69 Am. St. Rep. 525; 43 Atl. 27.
13 Ex parte Taylor, 8 De Gex, M. & G. 254; Adams v. Beall, 67 Md. 53; 1 Am. St. Rep. 370; 8 Atl. 664;
Page v. Morse, 128 Mass. 99; Moley v. Brine, 120 Mass. 324; Breed v. Judd, 1 Gray (Mass.) 455.
14 Moley v. Brine, 120 Mass. 324. "Whilst fully recognizing the privilege which the law accords minors in regard to contracts made during their minority, yet in a case like the present, where money is paid by a minor in consideration of being admitted as a partner in the business of the appellant, and he does become and remains a partner for a given time, he ought not to be allowed to recover back the money thus paid, unless he was induced to enter into the partnership by the fraudulent representations of the appellant." Adams v. Beall, 67 Md. 53, 59; 1 Am. St. Rep. 379; 8 Atl. 664.
15 Sparman v. Keim, 83 N. Y. 245. In Heath v. Stevens, 48 N. H. 251, an agreement by A to pay the fare of B., a minor, to New York, and if he was not accepted for enlistment, to pay his expenses home again; if B was accepted and received a bounty, B was to pay A $200. B was accepted, received a bounty of $700, and paid A $200. B subsequently sued to rescind, and he was allowed to do so, and to recover $200 less his expenses to New York. The facts of this case resemble Breed v. Judd,